Economic and housing market growth was slow in the first quarter but both are expected to pick up as the year goes on. In fact, according to Fannie Mae’s Economic & Strategic Research Group, that expected pick up should begin this quarter and carry through the rest of the year. Doug Duncan, Fannie Mae’s chief economist, said the agency has downgraded their housing forecast slightly but the recent loss of momentum is a temporary one. Duncan believes housing will contribute to economic growth this year, with both new home sales and new residential construction experiencing increases over last year’s totals. Existing-home sales, on the other hand, have been relatively flat, due in part to the fact that there are fewer distressed properties being sold to real-estate investors this year as compared to the year before. Despite a slower-than-expected first quarter, however, Fannie Mae is still predicting a slight increase in overall economic growth in 2014 over last year’s pace. More here.
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Analysts from Fannie Mae’s Economic & Strategic Research Group are forecasting gains for the spring and summer season. After a slow start to the year, economic growth is expected to pick up in the second quarter and continue to build through the end of the year. Doug Duncan, Fannie Mae’s chief economist, said economic and housing growth will emerge from the tough winter weather and gain momentum into the spring and summer seasons. According to Duncan, fiscal and monetary policy jitters have waned and recent employment numbers came in at reasonable levels. Those improvements should help economic activity and boost the housing market. In fact, Fannie Mae expects a nearly 20 percent increase in housing starts this year and an improved market for newly built homes. The new home market faces less competition from foreclosures and distressed properties, Duncan said. And, with supply low, new home sales should continue to perform well. Generally, Fannie Mae expects the rise in home prices and mortgage rates to take a toll on sales and homebuilding, though they are forecasting modest gains for housing overall this year. More here.
Fannie Mae’s Economic & Strategic Research Group expects economic growth to post modest gains in 2014, despite a slow start to the year. Various factors have contributed to the decline in economic activity during the first quarter of the year, including harsh weather and slower employment growth. In fact, cold winter weather has been blamed for slowing everything from residential construction to consumer spending and home sales across the country. Still, Fannie Mae expects these conditions to be temporary and believes the economy will accelerate later this year. Doug Duncan, Fannie Mae’s chief economist, said they expect the impact from special factors currently weighing on activity to reverse and believe there will be a sufficient pickup to meet their forecast for modest economic growth in 2014. More here.
Economic growth is expected to gain momentum in the new year, according to Fannie Mae’s Economic & Strategic Research Group. A rebound in consumer sentiment, an improving labor market, and the continued housing recovery are all expected to drive economic activity and boost consumer and business spending throughout the year. Doug Duncan, Fannie Mae’s chief economist, said the housing recovery’s contribution to GDP should double last year’s, due in large part to increased homebuilding activity and continued improvement in the market overall. According to Duncan, consumer attitudes about housing are strengthening, despite last year’s mortgage rate and home price increases. That, and the fact that many housing indicators posted strong gains at the end of 2013, bodes well for a continued but measured housing recovery this year. Less uncertainty surrounding the federal government’s fiscal and monetary policy is also expected to lead to improved private-sector activity and economic gains. Overall, Duncan feels the economy is on a sustainable path for continued growth in 2014. More here.
The number of Americans who have a positive perception of the current housing market has improved significantly from a year earlier, according to Fannie Mae’s December National Housing Survey. The year-over-year gains reflect an increasingly strong recovery, despite a dip in sentiment during the fall. For example, the percentage of respondents who feel it’s a good time to sell a house rose from 21 percent to 33 percent over the last year. The percentage of participants who said they felt it would be easy to obtain a home mortgage also increased over the past 12 months, from 45 percent last year to 50 percent in the most recent survey. Doug Duncan, senior vice president and chief economist at Fannie Mae, said consumer attitudes about the ease of getting a mortgage today are at their highest level in the survey’s three-and-a-half-year history. According to Duncan, that improvement should help offset the effects of higher mortgage rates and support a continued but measured housing recovery as we move through 2014. Also, the number of Americans who believe now is a good time to buy a home jumped to 67 percent and the percentage of respondents who feel their personal financial situation will get better in the next year was up four points to 42 percent. More here.
Consumer confidence has rebounded since October’s government shutdown and should continue to strengthen in 2014 as fiscal and monetary policy issues begin to clear. According to Fannie Mae’s Economic & Strategic Research Group, the improvement should lead to gains in consumer spending, manufacturing activity, and economic growth – all of which will contribute to the housing market’s continued recovery. Doug Duncan, Fannie Mae’s chief economist, said housing will continue on a modest upward trend toward more normal levels in 2014, with additional home price increases tempered by declining investor activity in the market. Duncan said housing indicators met the group’s expectations for 2013 and should continue their gradual march toward normal in the new year. More here.
Americans are feeling cautious about their money and the housing market as 2013 comes to an end. Surveyed for Fannie Mae’s November National Housing Survey, nearly two-thirds of Americans said they believe the economy is headed in the wrong direction and that their personal finances will worsen in the next year. Despite the pessimism, however, the housing market is still expected to improve. Doug Duncan, senior vice president and chief economist at Fannie Mae, said caution is the defining feature of Americans’ attitudes toward the economy. In this environment, according to Duncan, the housing market is likely to improve but only at a gradual pace. Still, a majority of Americans said they would buy, rather than rent, if they were to move and 64 percent feel that now is a good time to buy a home. The number of respondents who felt it would be easy for them to obtain a home mortgage rose 4 percentage points to 50 percent. More here.